International Economic Crisis and the Hungarian Pension Reform
AbstractBy 2008, the Hungarian pension system has become too generous and the implied contribution rate hindered growth. When the international economic and financial crisis deprived Hungary from normal credits, its government turned to international organizations for help. The most spectacular element of the conditions attached to the bail-out package was the short and long-run reduction of pension benefits. Within months, the Hungarian government eliminated the unsustainable 13th month benefit, reduced health-insurance contribution rates, replaced wage-price indexation with price indexation and worked out a drastic rise in the normal retirement age in the medium-run. The newly elected conservative party has practically closed the second pillar and plans to use up the released capital to reduce the government deficit, debt and finance public expenditures.
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Bibliographic InfoPaper provided by Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences in its series IEHAS Discussion Papers with number 1111.
Length: 18 pages
Date of creation: Feb 2011
Date of revision:
international economic crisis; Hungary; pension reform;
Find related papers by JEL classification:
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
- H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-04-30 (Economics of Ageing)
- NEP-ALL-2011-04-30 (All new papers)
- NEP-TRA-2011-04-30 (Transition Economics)
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- Major, Klára & Varga, Gergely, 2013.
"Parametrikus nyugdíjreformok és életciklus-munkakínálat
[Parametric pension reforms and life-cycle labour supply]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1169-1207.
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